A claim settled during the lifetime of the injured person may have a significantly different value to a claim brought after death by his or her surviving dependents or estate.
This can affect when it is best for a claim to be brought. It’s a complex issue unique to each case so we recommend speaking to a solicitor to decide which option is most suitable, but this article will introduce you to the main concepts that influence the financial impact an early death caused by industrial disease can have upon a claim.
The Basic Principles
Compensation is usually awarded on the theory that it will put the injured party back in the position he or she would have been in if they had not been wronged. The court is not normally concerned with imposing any penalty or punishment on the defendant wrong-doer.Compensation is calculated differently for a living victim compared to a person who has already died.
Living Victim: compensation is for the loss he or she suffers during his lifetime and during the notional years by which life will be shortened due to premature death, referred to as the “lost years”.
Claim brought by victim’s estate or dependent posthumously: the claim may take into account the continuing losses suffered by those dependents after death in addition to the loss suffered by the deceased up until the date of death.
The potential for a larger (or smaller) amount of compensation after death
In order to place a monetary value on a claim, lawyers identify different categories or ‘heads’ of loss (take a look at our article on heads of loss to find out more). The calculation of compensation for some heads of loss will necessarily be affected by the event of death. For example, claims for ongoing care or treatment would stop immediately as at the date of death or, if calculated in advance for the living claimant, at the expected date of death. However, because the rules which have evolved through case law as to how the calculation of loss for particular heads of loss vary, the calculation for some heads of loss can produce very different figures for a claim by a living claimant rather than the claim by his or her estate or dependent after death.
Loss of income
Usually it is only the injured party that loses his or her income due to the injury and consequent death. However, the value of that loss can be measured in different ways. This is often the most significant factor making a difference between how a claim is pursued. Here’s how it works: The situation for a living claimant:
Generally, if a claimant cannot work because of their injury, a claim can be made for the loss of earnings. Where death is expected, this claim will count for the years by which life has been shortened, the “lost years”. So as not to overcompensate, the living claimant must give credit for the saving on his own living expenses which will not be incurred during the “lost years”. Similar principles apply in relation to other loss of income such as pension loss. The situation for a claim by person(s) dependent on the deceased:
The calculation is different for the claim brought later by persons dependent on the deceased, such as a widow and who would, but for the death, have benefitted from the continuing income. In this situation the claim for ongoing loss is for loss of dependency.
Put another way, a claim for loss of income by a living claimant is usually worth less (sometimes it is worth more) than a claim by dependents after death which includes also the effect of loss of income. This may seem strange as it is exactly the same injured person and loss of income in each claim, but the calculations are different.
An Example Claim:
- A married man is dying from an industrial disease. This is his situation:Net income: £30,000
- His wife does not earn
- They have no children
It is usually presumed that the earner will have spent their income equally:
- £10,000 on himself
- £10,000 on joint needs and expenses
- £10,000 on his wife
That means the lost years for the living claimant would come to £15,000 per annum. £10,000 for himself and half of their joint needs and expenses. So out of the £30,000 only £15,000 makes it into the compensation because during the lost years savings will be made on the joint expenses.
When the claim is brought by the dependent widow the total comes in at £20,000 per annum. Against the £30,000 annual loss the widow is awarded for the loss of her money £10,000 and the total money spent on joint needs and expenses £10,000. So in this case the total is £5,000 more than it would have been had a claim been made prior to death.
The above examples show contrasting net claims of 50% or 66.6% of the loss of income. The appropriate percentage calculations will differ according to the facts of a case, for example, if there are dependent children or the spouse has an income. The effects may be equally dramatic. It could also be, perhaps where the surviving spouse earns more, that the living claim is higher. One should remember also that sometimes the above general method of calculation, which is based upon presumptions as to spending habits, is not appropriate at all and more detailed methods could be appropriate.
Loss of services
A living claimant can make a claim for their lost ability to perform tasks such as DIY, gardening, car maintenance etc, on the assumption that they will now have to rely on others to do these tasks, either by paying for care, or to make up for those who will doing these tasks without financial compensation. This does not however roll into the “lost years”, as the claim is solely for the claimant loss, not dependents reliance on them.
A dependent though can make a claim for the lost years in this scenario, because they may have relied on the claimant to do DIY work and that will still be lost after death.
So, continuing the example above, the living claimant may seek say £1500 a year until his anticipated date of death for his reliance on others during incapacity. His claim then stops. For a claim by the dependents, such as the spouse, the claim continues during the lost years, potentially for an equivalent amount.
An award may be made for the intangible services of the deceased. This refers to identifying the special quality of a parent’s love and devotion to a child or an individual’s care for a disabled spouse, qualities that may not simply be provided by a housekeeper or nanny or paid carer. This award may be up to £5,000 or arguably more
This claim can only be made after death. It cannot be brought by the living claimant.
There is no doubt that funeral expenses can be recovered in claims by the estate or dependents of a deceased. This is likely to run into a claim for thousands of pounds.
However, although such expenses are easily foreseen by the living claimant, there are conflicting views about whether or not in principle they can be sought by the living claimant. Certainly one may anticipate a defendant challenging such a claim until there is clear legal authority one way or another.
Damages for bereavement -a fixed sum
Where the claimant has died then an entitlement to a statutory award of “bereavement damages” will arise. This is a fixed sum, presently £12,890 for deaths after 01 April 2013. There is no claim for a living claimant.
How and when to claim and settle
Where the potential value of the claim may differ dramatically, involving tens of thousands of pounds or more, the decision whether to bring or settle a claim before death may be a very important decision – and not just for the injured party and family and dependents but also for the defendant.
Rather than wait and fight a potentially lengthy battle about liability and the value of claim, a significant difference in value might encourage either or both parties to settle. The injured party may wish to accept less but get the chance to enjoy having the money during lifetime or the injured party may not be interested in settling quickly but is concerned to know that as much as possible can be obtained for those to be left behind. From the other point of view, the defendant may be willing to pay more early on rather than risk facing a higher value claim later. Taking a more unusual scenario where the living claim is valued higher than the claim after death, it is possible to see that a defendant might try and delay whilst the claimant wants to press on as quickly as possible.
One alternative to consider is whether a claim should be brought by the living claimant and provisional damages or an interim payment sought, but seeking a stay of the action otherwise until after death, so preserving claims which might be made by the relatives or dependents but which would otherwise have been prevented by settlement or full judgement in favour of the deceased while living. A settlement might also specifically preserve the right to bring such claims. (Our article “Fatal accidents – who can claim – what can be claimed” provides some information about claims brought by the estate, relatives or dependents of a deceased.)
The need for expert analysis
As can be seen from the above examples, where a claimant is dying from industrial disease, the calculation of the amount of compensation to be claimed will vary according to not just the head of loss but also when the claim is litigated or perhaps settled before litigation. With all the emotional and other stresses being experienced by a dying claimant and his or her family and friends, it is important that expert advice is sought and taken about the possible options.
And we recognise that where the claimant is dying or has suffered the loss of a loved one, the claimant should be able to trust a lawyer to provide the help that is needed to pursue a claim in often very difficult times. Expert analysis and advice is important to enable choices to be made by the particular claimant including when and what issues to fight and when and whether to settle.